In
Valard Construction Ltd. v. Bird Construction Co.,
2018 SCC 8, a decision affecting those working in the construction
industry, a majority of the Supreme Court found that
trustees of trusts contained in labour and material payment bonds owe a
duty to disclose the existence of the bond to potential beneficiaries
of the trust. According to the court,

In general, wherever a
beneficiary would be unreasonably disadvantaged not to be informed of a
trust’s existence, the trustee’s fiduciary duty includes an obligation
to disclose the existence of the trust. In the circumstances of
this appeal, where the evidence was that labour and material payment
bonds were uncommon in the pertinent sector (private oilsands
construction), and where the trustee’s failure to disclose the
existence of the trust prevented the beneficiary from making a claim
within the prescribed notice period, that duty was breached. (para. 2)

The court found that Bird, the general contractor and trustee under a
labour and material payment bond, committed a breach of trust by
failing to notify Valard, a subcontractor, of the existence of the bond
during the 120-day notice period. Bird was ordered to compensate Valard
for its losses.

These articles discuss the implications of the decision for the
industry:

BLA Does Not Apply to Contracts or
Work Related to Hydro Project: MBQB

Section 3(3) of The Builders’ Liens Act
exempts Manitoba Hydro from the provisions of the Act with respect to
contracts entered into for construction of the Keewatinohk Converter
Station component of Bipole III, according to the court in American Piledriving Equipment, Inc. v.
Manitoba Hydro,
2018 MBQB 27. The court rejected the argument of the plaintiff (who was
owed more than US$3 million by a bankrupt project sub-contractor) that
the intent of the legislature in enacting s.3(3) was to exclude Hydro
from the provisions of the BLA
only if statutory protections for project sub-contractors similar to
those in the BLA
existed elsewhere. In the court’s view, Hansard evidence as to the
legislative intent in enacting the Hydro exemption did not establish a
sufficiently reliable foundation to conclude that s.3(3) has no
application.

Oppression Remedy Not
Suited to Addressing Family Dispute: MBQB

In Lopes
v. M.R. Lopes Investments Inc., et al.,
2018 MBQB 5, a departing director of a small, informally run family
business was unsuccessful in his oppression action under s. 234 of The Corporations Act.
According to the court, three factors provided the context for
assessing whether oppressive conduct existed: first, the business was
small, family run and informal; second, the applicant had not been
forced out of the business and the allegations related to conduct that
happened after he had decided to leave; and third, many of the
allegations related to dissatisfaction with the litigation process
rather than the conduct of the respondents. Credibility was also at
play. In the end, the court found that the remedies available under s.
234 were not suited to addressing what was really a family dispute and
dismissed the application.

Legislative Update

Federal

Bill
C-25, An
Act to amend the Canada Business Corporations Act, the Canada
Cooperatives Act, the Canada Not-for-profit Corporations Act, and the
Competition Act, is in third reading before the Senate. It
proposes significant changes to corporate governance, shareholder
participation, and gender diversity for issuers incorporated under the CBCA. For further details see the legislative
summary and these articles and blog posts from Canadian
Lawyer, Blakes,
BLG,
Dentons, Norton
Rose Fulbright, and Osler.

Bill
C-49, An
Act to amend the Canada Transportation Act and other Acts respecting
transportation and to make related and consequential amendments to
other Acts, is progressing through the Senate and was referred
to the Standing Senate Committee on Transport and Communications on
December 8, 2017. It aims to modernize transportation laws in Canada,
improving freight rail safety and efficiency; liberalizing
international ownership restrictions for Canadian air carriers; and
establishing new air passenger rights. For further information see the legislative
summary, departmental
information, and Transportation
2030 strategic plan.

The Local
Vehicles for Hire Act, C.C.S.M. c. L195, came into force on
February 28, 2018. It repeals The
Taxicab Act and allows municipalities to make by-laws
regulating the entire vehicle-for-hire industry. Further details can be
found in the explanatory
note to the bill and in this government news
release concerning the approved regulatory changes.

Bill 3,
The Canadian Free Trade
Agreement Implementation Act (Labour Mobility Act and Regulated Health
Professions Act Amended), is in first reading. It makes
administrative amendments to The
Labour Mobility Act and The
Regulated Health Professions Act
to reflect that federal and provincial governments have agreed to a new
domestic trade agreement, the Canadian Free Trade Agreement.

Bill 7, The Sustainable Watersheds Act (Various
Acts Amended), amends four acts to improve water management in
Manitoba. For further information see the explanatory
note to the bill.

Bill 11,
The
Safe and Responsible Retailing of Cannabis Act (Liquor and Gaming
Control Act and Manitoba Liquor and Lotteries Corporation Act Amended),
amends The Liquor and Gaming Control
Act and The Manitoba Liquor
and Lotteries Corporation Act to
authorize and regulate the retail sale of cannabis in Manitoba when
such sales are permitted by the federal government. For further details
see the explanatory
note.

Federal Budget 2018

The
federal government tabled its budget on February 27, 2018 and legal
commentators were quick to respond, particularly with analysis of the
tax provisions. For a sampling see:

The Department of
Finance Canada released its consultation
paper
on reviewing Canada's anti-money laundering and anti-terrorist
financing regime on February 7, 2018 and invites submissions on the
proposals until April 30, 2018. These Blakes
and Cyberlex
articles summarize the most significant proposals set out in the paper.

Patent Term Adjustments Come to Canada
– this Slaw post discusses recent amendments to the Patent Act and
regulations providing for Certificates of Supplemental Protection,
which can effectively extend the term of some patents beyond twenty
years.

Hot
Topics in Tax: Considerations for Your Practice Structure, Billing
Practices and Income
- an experienced panel consisting of tax counsel, accountants and
an actuary will cover a wide range of issues at this May 10, 2018
half-day program, including: tax changes regarding work in progress and
the elimination of billed-basis accounting; GST/HST and PST on fees;
individual pension plans for incorporated lawyers; new rules on income
splitting; the tax effects of withdrawal from partnership; and Budget
2018 changes. Register
soon to secure your spot.

Labour
Abuses and Supply Chain Management
– a Toronto lawyer who provides advice on international human rights
and labour laws will discuss trends in regulation of labour abuses and
market practices in supply chain management policies and certifications
at this CCCA presentation. The program takes place from 6:00 to 10:00
pm on March 15, 2018, at the Manitoba Human Rights Museum.
Subdivision of land outside the City of Winnipeg - representatives
from Manitoba Community and Regional Planning Services will speak on
aspects of the subdivision process under The Planning Act
(including both standard and minor subdivision processes, updated
application requirements, and how to assist clients in fulfilling
subdivision conditions) at this joint meeting on March 22, 2018. The
meeting will be held from 5:00-6:30 pm at MLT Aikins LLP.

The
General Data Protection Regulation (GDPR)
– find out how Europe's new privacy law, which will apply to anyone who
holds EU resident data, will affect you and your clients at this lunch
program on April 26, 2018. The program will be held at the Law Society
classroom, 219 Kennedy St.

ISSN 1916-3916

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